Page semi-protected

Binance

From Wikipedia, the free encyclopedia
Jump to navigation Jump to search

Binance
Industrycryptocurrency industry Edit this on Wikidata
FoundedJuly 2017; 5 years ago (July 2017)[1][2]
Founders
Area served
Global, except for the United States[4]
Key people
Changpeng Zhao (CEO)
ProductsCryptocurrency exchange, cryptocurrencies
Revenue~US$20 billion[5]
SubsidiariesCoinMarketCap
Websitewww.binance.com

Binance is a cryptocurrency exchange which is the largest exchange in the world in terms of daily trading volume of cryptocurrencies.[6] It was founded in 2017 and is registered in the Cayman Islands.

Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software. Binance was initially based in China, but later moved its headquarters out of China shortly before the Chinese government imposed regulations on cryptocurrency trading.

In 2021, Binance was put under investigation by both the United States Department of Justice and Internal Revenue Service on allegations of money laundering and tax offenses.[7][8][9] The UK's Financial Conduct Authority ordered Binance to stop all regulated activity in the United Kingdom in June 2021.[10]

In 2021, Binance shared client data, including names and addresses, with the Russian government.[11]

History

5 years birthday Binance cake in Paris in July 2022.

2013–2017: company beginnings and move out of China

CEO Changpeng Zhao had previously founded Fusion Systems in 2005 in Shanghai; the company built high-frequency trading systems for stockbrokers. In 2013, he joined Blockchain.info as the third member of the cryptocurrency wallet's team. He also worked at OKCoin as CTO for less than a year, a platform for spot trading between fiat and digital assets.[12]

The company was founded in 2017 in China but moved its servers and headquarters out of China and into Japan in advance of the Chinese government ban on cryptocurrency trading in September 2017.[13]

2018–2019: launch of stable coin and security breach

In January 2018 it was the largest cryptocurrency exchange with a market capitalization of $1.3 billion,[14] a title it had retained as late as April 2021, despite competition from Coinbase, among others.[15]

In March 2018, Binance announced its intentions to open an office in Malta after stricter regulations in Japan and China.[16] In April 2018, Binance signed a memorandum of understanding with the government of Bermuda.[17] Months later, a similar memorandum was signed with the Malta Stock Exchange to develop a platform for trading security tokens.[18] In 2019, company announced Binance Jersey, an independent entity from its parent Binance.com exchange, with the aim to expand its European influence. Jersey based exchange offers fiat-to-cryptocurrency pairs, including the Euro and the British pound.[19]

In August 2018, Binance along with three other big exchanges raised $32 million for a stablecoin project. The idea of stable coins is to provide a cryptocurrency without the notorious volatility of Bitcoin and other popular digital assets.[20]

In January 2019, Binance announced that it had partnered with Israel-based payment processor Simplex to enable cryptocurrency purchases with debit and credit cards, including Visa and Mastercard. The purchases are subject to Simplex's local bank policies and are limited to Bitcoin, Ethereum, Litecoin and Ripple's XRP.[21]

On 7 May 2019, Binance revealed that it had been the victim of a "large scale security breach" in which hackers had stolen 7,000 Bitcoin worth around U.S.$40 million at the time.[22] Binance CEO Changpeng Zhao said the hackers "used a variety of techniques, including phishing, viruses and other attacks" and structured their transaction "in a way that passed our existing security checks."[23] Binance halted further withdrawals and deposits but allowed trading to continue. The site pledged to reimburse customers through its "Secure Asset Fund for Users (SAFU)".[24][25] Withdrawals resumed by 19 May.[26][better source needed]

In September 2019, the exchange began offering perpetual futures contracts, allowing leverage as high as 125 times the value of the contracts.[27] In November 2019, Binance announced it was acquiring Indian bitcoin exchange WazirX, which became disputed in August 2022 when Binance founder Zhao claimed the deal was never signed.[28]

2020–2022: acquisitions and investments

On 21 February 2020, the Malta Financial Services Authority (MFSA) issued a public statement responding to media reports referring to Binance as a 'Malta-based' cryptocurrency company. The statement noted that Binance "is not authorized by the MFSA to operate in the cryptocurrency sphere and is therefore not subject to regulatory oversight by the MFSA." The MFSA added that it was "assessing if Binance has any activities in Malta which may not fall within the realm of regulatory oversight."[29]

In March 2020, Binance acquired CoinMarketCap.[30] Although the price of the acquisition was not disclosed, it’s reported to be up to $400 million. CoinMarketCap was founded in 2013 and is one of the largest cryptocurrency online tracking tools.[31]

On 28 October 2020, Forbes staff released leaked documents showing that Binance and Changpeng Zhao created an elaborate corporate structure designed to intentionally deceive United States regulators and secretly profit from cryptocurrency investors located in the country.[4] Binance officially blocks access from IP addresses located in the United States, but "potential customers would be taught how to evade geographic restrictions", Forbes claimed.[4]

In May 2021 it was reported that Binance was under investigation by both the Internal Revenue Service and the United States Department of Justice on allegations of money laundering and tax offenses.[7][8][9]

In February 2022, Binance took a $200 million stake in Forbes.[32]

In March 2022, amidst the 2022 Russian invasion of Ukraine, Binance's CEO Changpeng Zhao, refused to ban users from Russia, citing "financial freedom".[33] Binance later softened the tone of their opposition but not their policy, and also pointed to their donation of $10 million for humanitarian needs in Ukraine.[34]

In April 2022, Reuters reported that, in 2021, Binance shared information with Rosfinmonitoring about funds raised by jailed Russian opposition leader Alexei Navalny's network.[35]

On 27 May 2022, Binance announced the registration of its legal entity in Italy, and has plans of opening offices and expanding the local team in the area. CEO Changpeng Zhao also shared information regarding Binance's registration with France's market regulator. The company is also seeking registration in more European countries, such as Switzerland, Sweden, Spain, Netherlands, Portugal and Austria.[36]

On 13 June 2022 Binance announced that users would, for an unspecified period of time, be unable to withdraw their funds held in Bitcoin, as the value of cryptocurrencies suffered serious declines.[37] Two hours after that announcement, Bitcoin withdrawals were allowed to resume.[38][better source needed]

Binance has a strong brand presence in Africa. Binance sponsored the Africa Cup of Nations in 2021.[39][40] It is also taking crypto education to many countries on the continent.[41]

Binance invested US$500 million towards the acquisition of Twitter by Elon Musk that completed in October 2022. Following the investment, the company announced the creation of a team to work on how blockchain and cryptocurrencies could be helpful to Twitter.[42][43]

On 8 November 2022, Binance offered to buy rival cryptocurrency exchange FTX's non-US operations (FTX.com) to help cover the latter's liquidity crunch.[44][45] Binance backed out of the deal the next day citing concerns about FTX's business practices and investigations by US financial regulators.[46]

Binance coin (BNB)

Build'N'Build
BNB, native cryptocurrency for the Binance Smart Chain.svg
Denominations
CodeBNB
Previous namesBinance Coin
Development
White paperBNB Whitepaper
Initial releaseJuly 2017; 5 years ago (2017-07)
Development statusActive
Ledger
Block explorerbscscan.com
Circulating supply161,337,261.09
Supply limit200,000,000
Valuation
Exchange rate~300$
Market cap$47,892,036,167
Website
Websitewww.bnbchain.org

Throughout its history, the company has launched two cryptocurrencies which it developed itself: Binance Coin (BNB), and BinanceUSD (BUSD). [47] BNB launched July 2017,[citation needed] which started as an Ethereum token and later moved to Binance Smart Chain (BSC),[48] launched September 2020.[49] BSC later merged with the older Binance Chain and was rebranded into BNB chain.[50][51][better source needed] BNB Chain operates using "Proof of Staked Authority", a combination of proof of stake and proof of authority. It has 21 approved validators. As of 2021, Binance Coin was the cryptocurrency with the third highest market capitalization.[47] Binance allows its users to pay fees on its exchange with BNB.[47]

BSC supports smart contracts and is compatible with the ethereum virtual machine (EVM).[citation needed]

There have been multiple criticisms of Binance Smart Chain concerning its level of centralisation, which had led to several exploits on the network.[50]

BUSD

Binance USD
Denominations
CodeBUSD
Development
Initial releaseSeptember 10, 2019; 3 years ago (2019-09-10)
Development statusActive
Ledger
Block exploreretherscan.io
Circulating supply19,016,156,336.57 (As of 23 August 2022)
Supply limitUnlimited
Valuation
Exchange ratePegged to the US Dollar
Market cap$19,014,856,231
Website
Websitebinance.com/en/busd

BUSD, or BinanceUSD is a US Dollar pegged stablecoin issued by Binance.[52] According to Binance it is backed 1:1 by a reserve of US Dollars and was founded by them in partnership with Paxos who is the issuer of the token. Paxos holds the reserves only partially in cash deposited in their US bank accounts with the other part held in U.S. Treasuries. BUSD is natively issued on the Ethereum blockchain by Paxos. Binance creates Binance-Peg BUSD by locking the natively ERC-20 BUSD in a smart contract on the Ethereum Blockchain and issuing Binance-Peg BUSD equivalent to the amount held in reserve in the smart contract. Binance-Peg BUSD is native to BNB chain.[53][better source needed]

BUSD is a widely used stablecoin being the 3rd largest stablecoin by market capitalisation[54] following USDT and USDC.[55]

Legal status

United States

In 2019, Binance was banned in the United States on regulatory grounds. In response, Binance and other investors opened Binance.US, a separate exchange designed to comply with all applicable US laws.[citation needed] The US variant offers a very similar interface and feature set to its worldwide counterpart.[citation needed] However, it is banned in six states.[a] In May 2021, Bloomberg News reported that Binance was under investigation by the United States Department of Justice and Internal Revenue Service for money-laundering and tax evasion.[57] In June 2022, the US Securities and Exchange commission launched an enquiry into Binance to determine if the company's 2017 ICO of BNB tokens amounted to an illegal sale of a security.[58]

United Kingdom

In June 2021, Binance was ordered by the UK's Financial Conduct Authority to stop all regulated activity in the United Kingdom.[59][60] In January 2021, the FCA began requiring firms dealing with cryptocurrency to register in order to comply with anti-money laundering rules. As Binance is not compliant with these rules, it is being forced to cease operations within the coming weeks.[citation needed][may be outdated as of January 2021]

Japan

On June 25, 2021, Japan's Financial Services Agency warned Binance that it was not registered to do business in Japan.[61] This was the second notice Binance received from the FSA. Previously, a similar warning was issued on March 23, 2018.[62]

Italy

In July 2021, Italy's Commissione Nazionale per le Società e la Borsa ordered Binance to be blocked from operating.[63] In May 2022, Binance gained regulatory approval in Italy, allowing the company to provide digital asset services in the country.[64]

France

In May 2022, Binance gained regulatory approval in France, allowing the company to provide digital asset services in the country. France is the first European country to give Binance regulatory approval.[65]

Germany

In April 2021, the Federal Financial Supervisory Authority in Germany warned that the company risked fines for not releasing an investor prospectus for the stock tokens it has issued.[66]

Thailand

Thailand's Securities and Exchange Commission filed a criminal complaint against Binance on July 2, 2021, "for commission of offence under the Emergency Decree on Digital Asset Business B.E. 2561 (2018)". Additionally, Thailand's SEC cited Binance for operating without a license, a violation of Section 26 of the Digital Asset Businesses Emergency Decree.[67]

Canada

On March 17, 2022, Binance has confirmed in an undertaking to the Ontario Securities Commission that it would stop opening new accounts and halting trading in existing accounts for users in Ontario.[68][69]

Netherlands

In April 2022, The Dutch central bank announced a €3.3m fine for Binance due to offering services within the Netherlands without being registered in the country. The fine was issued to the company after an official warning was issued to the company during August 2021.[70]

India

In August 2022, India's Enforcement Directorate froze the assets of WazirX, an exchange owned by Binance, as part of a money laundering investigation.[71] Following the event, CEO Zhao clarified that they never owned WazirX or owned any equity in Zanmai Labs—the operating entity of WazirX—citing "a few issues" that prevented the completion of the acquisition. The co-founder of WazirX, Nischal Shetty, disputed Zhao's claims asserting that Binance had indeed acquired them.[72]

See also

Notes

  1. ^ Hawaii, Idaho, Louisiana, New York, Texas, and Vermont.[56]

References

  1. ^ Hyatt, John; Bambysheva, Nina (5 April 2022). "The Wealthiest Person In Crypto Climbs Into World's 20 Richest". Forbes.
  2. ^ Berwick, Angus; Wilson, Tom (21 January 2022). "Crypto giant Binance kept weak money-laundering checks even as it promised tougher compliance, documents show". Reuters.
  3. ^ Wilson, Tom; Berwick, Angus (17 October 2022). "How Binance CEO and aides plotted to dodge regulators in U.S. and UK". Reuters.
  4. ^ a b c "Leaked 'Tai Chi' Document Reveals Binance's Elaborate Scheme To Evade Bitcoin Regulators". Forbes. 28 October 2020. Retrieved 30 October 2020.
  5. ^ "World's Biggest Crypto Fortune Began With a Friendly Poker Game".
  6. ^ "Binance". Archived from the original on 14 May 2018.
  7. ^ a b "Crypto Exchange Binance Under IRS and DOJ Investigation". Daily Newsbrief.
  8. ^ a b "Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths". Bloomberg.com. 13 May 2021. Archived from the original on 13 May 2021. Retrieved 13 May 2021.
  9. ^ a b "Binance under investigation by Justice Department, IRS - Bloomberg News". Reuters. 13 May 2021. Retrieved 13 May 2021.
  10. ^ "Consumer warning on Binance Markets Limited and the Binance Group". fca.org.uk. 26 June 2021. Archived from the original on 26 June 2021. Retrieved 8 December 2021.
  11. ^ Berwick, Angus (22 April 2022). "Special Report: How crypto giant Binance built ties to a Russian FSB-linked agency". Reuters. Retrieved 22 April 2022.
  12. ^ Ambler, Pamela (7 February 2018). "From Zero To Crypto Billionaire In Under A Year: Meet The Founder Of Binance". Forbes.
  13. ^ Xiao, Eva (30 November 2017). "Three months after launch, this unbanked crypto exchange made $7.5m in profit". Tech in Asia.
  14. ^ Nakamura, Yuji; Lun, Haidi (11 January 2018). "World's Top-Ranked Crypto Exchange Adds 240,000 Users in One Hour". Bloomberg.com. Retrieved 8 March 2018.
  15. ^ de la Merced, Michael J.; Karaian, Jason (15 April 2021). "What's next for Coinbase?". The New York Times. ISSN 0362-4331. Retrieved 12 May 2021.
  16. ^ Nakamura, Yuji (23 March 2018). "World's Biggest Cryptocurrency Exchange Is Heading to Malta". Bloomberg. Retrieved 24 March 2018.
  17. ^ "The Continuing Development Of A Fintech Ecosystem For Bermuda" (PDF). Ber News. 27 April 2018. Archived (PDF) from the original on 19 January 2019. Retrieved 4 February 2021.
  18. ^ plc, Malta Stock Exchange. "MSE and Binance sign MoU". Malta Stock Exchange. Retrieved 19 January 2019.
  19. ^ "Crypto Giant Binance to Offer Euro Trading Pairs This Year". Bloomberg. 11 June 2018. Retrieved 14 June 2018.
  20. ^ "Binance and Other Crypto Exchanges Back $32 Million Stable Coin Project". Fortune. Retrieved 30 August 2018.
  21. ^ Russell, Jon (31 January 2019). "Binance now lets users buy crypto with a credit card". TechCrunch. Retrieved 31 January 2019.
  22. ^ Kharpal, Arjun (8 May 2019). "Binance bitcoin hack: Over $40 million of cryptocurrency stolen". CNBC. Retrieved 8 May 2019.
  23. ^ Valinsky, Jordan (8 May 2019). "Hackers steal $40 million worth of bitcoin in massive security breach". CNN. Retrieved 8 May 2019.
  24. ^ Stewart, Emily (8 May 2019). "If bitcoin is so safe, why does it keep getting hacked?". Vox. Retrieved 12 May 2021.
  25. ^ Thompson, Luke (8 May 2019). "Binance offers full refund after $40m hack". Asia Times. Retrieved 12 May 2021.
  26. ^ "Security Incident Recap". Binance Blog. 19 May 2019. Archived from the original on 20 May 2019. Retrieved 12 May 2021.
  27. ^ "Bitcoin Speculators Gain Upper Hand as Derivative Trading Surges". Bloomberg.com. 22 October 2019. Retrieved 21 January 2021.
  28. ^ "Disputed claims over acquisition announcement between WazirX and Binance". Insider Apps. Retrieved 12 August 2022.
  29. ^ "Public Statement". Malta Financial Services Authority. 21 February 2020. Archived from the original on 21 February 2020. Retrieved 26 February 2020.
  30. ^ "Binance Acquires CoinMarketCap | Paul Hastings LLP".
  31. ^ "Binance acquires cryptocurrency market tracking service CoinMarketCap". 2 April 2020.
  32. ^ "Crypto exchange Binance to take $200m stake in Forbes". BBC News. 10 February 2022.
  33. ^ "Ukraine crisis: Crypto exchange boss rejects Russian user ban". BBC News. BBC News. 2 March 2022.
  34. ^ "How the Ukraine conflict became a turning point for cryptocurrency". NBC News. Retrieved 7 March 2022.
  35. ^ Berwick, Angus; Wilson, Tom (22 April 2022). "Special Report: How crypto giant Binance built ties to a Russian FSB-linked agency". Reuters. Retrieved 22 April 2022.
  36. ^ "Binance registers with Italy's regulator amid plans to expand in Europe". Reuters. 27 May 2022. Retrieved 29 May 2022.
  37. ^ Griffin, Andrew (13 June 2022). "Crypto exchange Binance blocks bitcoin withdrawals amid market collapse". Independent.
  38. ^ Binance (13 June 2022). "Withdrawals on Bitcoin (BTC) Network Resumed".
  39. ^ Endurance, Okafor (13 January 2022). "Binance becomes official sponsor of 2021 TotalEnergies Africa Cup of Nations". Businessday NG. Retrieved 11 October 2022.
  40. ^ "Binance Has Deal to Become Crypto Sponsor of Africa Cup of Nations Soccer Tournament". www.sporttechie.com. Retrieved 11 October 2022.
  41. ^ Nnamani, Caleb (21 September 2022). "Binance is touring francophone Africa with crypto education". TechCabal. Retrieved 11 October 2022.
  42. ^ Hu, Krystal (28 October 2022). "Crypto exchange Binance, Musk's co-investor, to help Twitter with blockchain". Reuters.
  43. ^ Kowsmann, Patricia (28 October 2022). "Crypto Exchange Binance Confirms $500 Million Investment in Elon Musk's Twitter". The Wall Street Journal.
  44. ^ Yang, Yueqi; Kharif, Olga (8 November 2022). "CZ's Binance to Buy Rival FTX After Sam Bankman-Fried Faces Liquidity Crunch". Bloomberg News.
  45. ^ Sigalos, MacKenzie (8 November 2022). "Binance offers to buy FTX's non-U.S. operations to fix 'liquidity crunch'". CNBC.
  46. ^ Sigalos, MacKenzie; Rooney, Kate (9 November 2022). "Binance backs out of FTX rescue, leaving the crypto exchange on the brink of collapse". CNBC.
  47. ^ a b c Anneken, Tappe (22 April 2021). "Bitcoin? Ethereum? Dogecoin? Your guide to the biggest names in crypto". CNN. Archived from the original on 22 April 2021. Retrieved 12 May 2021.
  48. ^ Vigna, Paul (3 May 2021). "Ethereum Is Booming in the NFT Frenzy—So Is Network Congestion". Wall Street Journal. ISSN 0099-9660. Archived from the original on 3 May 2021. Retrieved 12 May 2021.
  49. ^ "Battle of the blockchains: Binance Smart Chain versus Ethereum". uk.finance.yahoo.com. Retrieved 10 September 2022.
  50. ^ a b Odejumo, Oluwapelumi (16 February 2022). "Binance Smart Chain Rebrands to BNB Chain, Reveals Multi-chain Goal". Yahoo Finance. Retrieved 22 August 2022.
  51. ^ "Introducing BNB Chain: The Evolution of Binance Smart Chain". Binance.com. Binance. 15 February 2022. Retrieved 19 August 2022.
  52. ^ Howcroft, Elizabeth (11 August 2022). "Crypto derivatives volumes surge to $3.12 trillion in July - CryptoCompare". Reuters. Retrieved 22 August 2022. BinanceUSD - a stablecoin issued by crypto exchange Binance
  53. ^ "What Is BUSD?". Binance Academy. Binance. 28 June 2022. Retrieved 19 August 2022.
  54. ^ Eichengreen, Barry; Viswanath-Natraj, Ganesh (February 2022). "Stablecoins and Central Bank Digital Currencies: Policy and Regulatory Challenges*". Asian Economic Papers. Massachusetts Institute of Technology. 21 (1): 29–46. doi:10.1162/asep_a_00843. eISSN 1536-0083. ISSN 1535-3516. S2CID 245866286. Retrieved 22 August 2022.
  55. ^ Y. Liao, Gordon; Caramichael, John (January 2022). "Stablecoins: Growth Potential and Impact on Banking". International Finance Discussion Paper. International Finance Discussion Papers. Board of Governors of the Federal Reserve System. 2022 (1334): 2–4. doi:10.17016/IFDP.2022.1334. eISSN 1073-2500. ISSN 1073-2500. S2CID 246518865.
  56. ^ "Binance.US Review: Low Fees, But Investors Should Take a Pass". Time. 20 July 2021. ISSN 0040-781X. Retrieved 29 July 2022.
  57. ^ Schoenberg, Tom (13 May 2021). "Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths". Bloomberg News. Retrieved 27 June 2021.
  58. ^ "US Probes Binance Over Token That Is Now World's Fifth Largest". Bloomberg.com. 6 June 2022. Archived from the original on 21 July 2022. Retrieved 7 June 2022.{{cite news}}: CS1 maint: bot: original URL status unknown (link)
  59. ^ "Britain bans Binance in latest cryptocurrency crackdown". Reuters. 27 June 2021. Retrieved 27 June 2021.
  60. ^ Azevedo Rocha, Priscila; Ossinger, Joanna (27 June 2021). "Crypto Exchange Binance Banned From Doing Business in U.K." Bloomberg News. Retrieved 27 June 2021.
  61. ^ "Japan Financial Services Agency - Binance Warning #2" (PDF). fsa.go.jp (in Japanese). Retrieved 17 September 2021.
  62. ^ "Japan Financial Services Agency - Binance Warning #1" (PDF). fsa.go.jp (in Japanese). Retrieved 17 September 2021.
  63. ^ Wilson, Tom; Irrera, Anna (15 July 2021). "Crypto exchange Binance unauthorised, says Italian regulator, as crackdown widens". reuters.com. Retrieved 26 August 2022.
  64. ^ Bartenstein, Ben (28 May 2022). "Binance Gets Back Into Italy With New Registration". bloomberg.com. Retrieved 26 August 2022.
  65. ^ "Binance gets regulatory nod in France, paving the way for Europe push". TechCrunch. 5 May 2022. Retrieved 14 June 2022.
  66. ^ "UPDATE 2-Germany's financial watchdog warns crypto exchange Binance over "stock tokens"". finance.yahoo.com. Reuters. 29 April 2021. Retrieved 13 May 2021.
  67. ^ "English (United States) News_Detail". sec.or.th. Retrieved 17 September 2021.
  68. ^ "Binance says users in Ontario restricted from using its platform - regulator". Reuters. 18 March 2022.
  69. ^ "Undertaking and Acknowledgement by Binance Holdings Limited" (PDF). Ontario Securities Commission. 17 March 2022.
  70. ^ "Dutch central bank fines Binance 3.3 million euros". thehindu.com. The Hindu. 19 July 2022. Retrieved 27 July 2022.
  71. ^ "India freezes assets of Binance-owned local unit WazirX". reuters.com. Reuters. 5 August 2022. Retrieved 5 August 2022.
  72. ^ Singh, Manish (5 August 2022). "Binance says it doesn't own Indian exchange WazirX, years after acquisition announcement". TechCrunch.

External links